Consumer preferences for alternative fuel vehicles: a discrete choice experiment from New Delhi, India

PurposeThe purpose of this paper is to analyze consumers’ preferences for alternative fuel vehicles, that is, battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hydrogen fuel cell vehicles (HFCVs). In addition, in alignment with the Government of India’s faster adoption and manufacturing of electric vehicles (FAME) scheme, the paper evaluates the impact of subsidies for BEVs on shaping consumer preferences.Design/methodology/approachThis study conducted a survey in August 2024 from two districts of Delhi, India – New Delhi and North West Delhi. A discrete choice experiment was designed, presenting respondents with four alternatives – battery electric vehicles plug-in hybrid electric vehicles, hydrogen fuel cell vehicles and conventional gasoline vehicles. This paper estimates conditional, random parameter and latent class logit models to estimate consumers’ willingness to pay for alternative fuel vehicles under no-subsidy and subsidy scenario.FindingsThe results show that consumers are willing to pay 1,275,000 rupees for BEVs, 1,239,000 rupees for PHEVs and 1,073,000 rupees for HFCVs. Attributes such as price, battery charging station, charging time are strongly valued. Also, subsidy for purchasing alternative fuel vehicles is an effective measure to increase willingness to pay for alternative fuel vehicles.Originality/valueTo the best of the author’s knowledge, this is the first paper to estimate consumers’ willingness to pay for alternative fuel vehicles in Delhi, India and examine how this willingness is influenced when a subsidy is introduced.